I did not think that Catholic morality was too much different than Christian morality, so I did a little looking. I was right, so this discussion of "A Municipal Report" by O. Henry will center around Bible-based morality.
The overriding theme in this story is that good triumphs over evil. We meet a lovely, sensitive, and articulate woman who is married to a cruel and abusive man; and Major Wentworth Caswell did not treat anyone well, even strangers. We know that he was not a good man, for when he died the only nice thing anyone could say about him was that he was one of the best spellers in the school when he was fourteen. He mistreated the young servant girl, Impy, as well as his wife. He is an evil man, and when he dies, good wins. In the largest sense, this is true in the Bible, as well. Satan does not win any battle he has with Jesus or his Creator, God.
On a smaller level, though, we are faced with some conflicting moralities.
Being kind to one another is a moral imperative, and we have several examples of this in the story. The first is what Uncle Caesar does for his former owner's daughter, Azalea Adair. He is the only one she will accept help from, and since he knows that and cares for her, he does what he can to help her--even if it means overcharging a passenger to do it. The second example of showing kindness (charity) is the narrator's efforts to ensure that his magazine pays her more than they intended and adds a fifty dollar advance on her salary. Clearly the woman would have been content with whatever pittance he offered her, but he understands her plight and gets her more.
While both of these acts are kind, they are also immoral, at least in the strictest sense of the word. The old man in essence cheats the narrator because he needs to give his friend money. While the motive is pure, the act of cheating is certainly not a moral act. The narrator also cheats his magazine by making them pay more than they would have had to, lying about what Azalea Adair demanded to be paid. Though it is true that both the narrator and the magazine were, in the end, happy to oblige, the acts of cheating and lying could not be described as moral acts--even with noble and moral intentions. The question is, which is the moral imperative: showing charity or being honest and forthright in all one's dealings. These two moralities are clearly in conflict here.
The most significant instance of questionable morality is Caswell's murder. We have pretty clear evidence that Uncle Caesar is the one who murdered Caswell. In a moment of foreshadowing, Uncle Caesar assures the narrator that Azalea Adair will be always be taken care of:
"She ain't gwine to starve, suh," he said slowly. "She has reso'ces, suh; she has reso'ces."
The most damning evidence against the old man is the button which fell from the dead man's hand, a button which obviously came from the old man's unique and memorable coat.
We understand why he did it: Caswell had taken the fifty-dollar advance his wife earned and was prepared to recklessly spend it, as always, leaving her to starve. Uncle Caesar could not allow this, so he killed Caswell. We also know that the narrator will never tell what he knows, a lie of omission. One of the first moralities of the Catholicism is obedience to the Ten Commandments, and each of these men--for all the right reasons--broke two of them. This is exactly the kind of conflicting moralities O. Henry wanted us to ponder long after we finish the story.